A Critical Evaluation of the new Electronic Communications Code


The Electronic Communications Code came into effect on 28 December 2017 and as from that date the rollout of telecommunications infrastructure has stalled and the market has stagnated. The key reforms to the Code include a no scheme method of valuation for assessing consideration and a less restrictive site sharing provision. The new valuation approach has resulted in the operators attempting to radically reduce rents across their portfolio of telecommunications sites. This research aims to clarify why the market has stalled and what can be done to stabilise it. After a comprehensive literature review, primary data is collected using a qualitative approach which is then evaluated using the method of triangulation. It is revealed that the operator’s valuation of rents based on the underlying value of land is arguable. The findings also reveal that the Code rights do not entitle the operators to exclusive possession, nor do they allow the operators to add equipment under the new site sharing provision. Furthermore, the study demonstrates that in some cases the site providers will be able to challenge the operator’s attempts to pass the “Paragraph 21 test”. It is also noted that ‘change of use’ and redevelopment schemes are likely to become more prevalent over time leading to a higher number of cases involving litigation. As it stands, the industry is awaiting direction in the form of rulings from the Lands Tribunal; however, it is revealed that these determinations may not allow the market to advance as expected. The study concludes by recommending a compromise is reached by both parties including a standard set of Heads of Terms for new Code agreements combined with a rate card comprising rent reductions of 40% across all sites, both of which are expected to help stabilise the market.

1.1 Background 1
1.2 Research aim and objectives 2
1.3 Value of research 2
2.1 Defining a delay 3
2.2 Code rights 4
2.3 Site sharing 4
2.4 Imposition of Code rights 6
2.5 Valuation of consideration (rent) 7
2.6 Compensation 10
2.7 Termination and right to remove 11
2.8 The Landlord and Tenant Act 1954 12
2.9 Summary 12
3.1 Research focus 13
3.2 Research strategy 13
3.3 Data collection 15
3.4 Framework for data analysis 17
3.5 Limitations and potential problems 18
4.1 Experiences under the new Code 19
4.2 Definition of Code rights 20
4.3 Site sharing 21
4.4 Valuation of consideration (rent) 21
4.5 Compensation 25
4.6 Betterment value 25
4.7 Timeframes 26
4.8 RICS guidance 26
4.9 Precedents 27
4.10 Not spots 27
4.11 Ransom rents 28
4.12 Human rights 28
4.13 Costs 28
4.14 Termination and right to remove 29
5.1 Summary 30
5.2 Recommendations 31
5.3 Further research 32
APPENDIX A – Research Participant Information Sheet 39
APPENDIX B – Interview Information 40
APPENDIX C – Proposed Heads of Terms 42
APPENDIX D – Proposed Rate Card 46


1.1 Background

The Code is a statutory instrument introduced by parliament to facilitate the rollout of digital communications infrastructure across the UK. It aims to provide the Code Operators with the powers they require to roll-out their digital infrastructure. Furthermore, it supports the growing demand from business and domestic consumers in terms of coverage and capacity. In 2016 the Gross Value Added from the digital sector was £116.5 billion, equating to 6.7% of the UK economy thereby illustrating the benefits to individuals and the UK as a whole (DCMS, 2018). Not only does the Code provide the Code Operators with security of tenure over and above the Landlord and Tenant Act 1954, it also allows them to impose an agreement on a landowner through the courts in cases where consensual agreement cannot be reached.

The Code was originally contained in the Telecommunications Act 1984 (as amended by the Communications Act 2003) (“the old Code”). It was initially introduced to assist BT with the rollout of its fixed line infrastructure in the early 1990’s. The old Code was considered complicated and quickly became outdated due to rapid advances in technology. In the words of Mr Justice Lewison in Geo Networks Ltd v The Bridgewater Canal Company Ltd , “The Code is not one of Parliament’s better drafting efforts, in my view it must rank as one of the least coherent and thought through pieces of legislation on the statute book”.

On 28th December 2017, the old Code was repealed and replaced with Schedule 1 of the Digital Economy Act 2017, located at Schedule 3a of the Communications Act 2003 (“the new Code”). The new Code introduces significant reforms to the rights that operators have to access land, including substantial changes to the way land is valued, similar to the approach found in compulsory purchase. It also provides the Code Operator with the automatic right to upgrade and share their telecommunications apparatus. According to DCMS (2016), the new Code will provide the operators with similar rights to utilities companies which will reduce their rental expenditure and create greater incentives for investment in fifth generation (5G) networks.

Since the new Code was implemented, the communications market has stagnated. The operators have withdrawn from negotiations under the old Code and offered their landlords “new Code” agreements which include rents based on the new valuation methodology. In some cases, the operators have attempted to reduce rents by 99% and are not willing to increase their offers. On the opposing side, the landowner’s agents are recommending that their clients do not respond to the operator’s proposals as to do so could prejudice their position if their case were to go to court. It is important to note that by not renewing the operator’s lease, the landlord will continue to receive the passing rent which is significantly higher than what the operators are offering under the new Code. This has resulted in the operators holding over at the end of their leases until such time that they either agree to increase their offers or make an application to the courts to impose an agreement on the landowner. It is this situation that has brought the market to standstill.

1.2 Research aim and objectives 

This research aims to critically evaluate the new Code to clarify why the market has stagnated and identify what options are available to both parties moving forward. This overall aim will be achieved by following four objectives as outlined below (set in the context of the telecommunications market):

1) Provide an overview of the Electronic Communications Code.
2) Describe and critically evaluate the key reforms under the new Code.
3) Explore stakeholder’s views surrounding the key reforms under the new Code.
4) Propose suitable recommendations on how to stabilise the market.

1.3 Value of research

Despite its importance, only a small amount of literature relating to the new Code has been published. Furthermore, very few studies have been investigated using a systematic approach. In addition to this, the research community appears to have made no attempt to undertake any practical research in this area.
By evaluating the strength of arguments presented by both sides, this research will demonstrate what has caused the delay in the market, what can be done to resolve it, and in what timeframe. In doing so, the UK will be able to continue rolling out a high class digital communications infrastructure network which will improve the economy by making the UK a more desirable place to live and work.


The previous chapter provided an overview of the new Electronic Communications Code which satisfies Objective 1 of this research. Objective 2 involves describing and critically evaluating the key reforms under the new Code which will be covered in the following chapter.

From hereafter the terms “site provider”, “landlord” and “landowner” will be used interchangeably, as will “operator”, “Code Operator” and “Mobile Network Operator” (MNO). The terms “court” and “Lands Tribunal” will also mean the same thing.

2.1 Defining a delay

This chapter begins by explaining what is considered to be a delay in the telecommunications market.
A telecommunications site can be either a greenfield mast, or rooftop installation. The average rent paid for a greenfield site is £6,000 per annum and for a rooftop site it is £11,000 per annum . The operators pay more for rooftop sites because they do not have to spend money on building a structure. Also, most rooftop sites are situated in built up areas which makes them more profitable.

The operators use Key Performance Indicators (KPIs) to evaluate the success of their agents. Deadlines are strict, and anyone that has worked in this environment will be all too aware of the pressures surrounding the rollout of sites. Firstly, the radio planner identifies an area of low coverage based on a radio survey. The acquisition surveyor then identifies a potential site provider and attempts to gain planning permission which normally takes around eight weeks to obtain. During the planning process, the surveyors acting for the respective parties negotiate Heads of Terms for a new agreement. This normally takes around two months and coincides with planning permission being granted. If planning consent is refused, either an appeal is lodged, or the site is withdrawn. Assuming planning permission is granted, and Heads of Terms are agreed, the case is passed over to the party’s solicitors and the lease is prepared. The same applies to renewal leases, except in most cases planning permission is already in place which means only the Heads of Terms need to be negotiated. The solicitors work to a three-month timeframe from start to finish. Therefore, the telecommunications surveyors usually work to a timeframe of around six months for the acquisition of a site from start to finish, which allows for delays from both sides.

Since the new Code was implemented, both parties have withdrawn from negotiations based on the operator’s “new Code“ proposals. At the time of writing, neither party appeared willing to engage. Therefore, even if both parties began negotiating terms, which seems unlikely, the earliest an agreement could be expected to complete would be early 2019. This is six months above the average timeframe which further illustrates the issues currently faced by the industry.

2.2 Code rights 

Under the new Code, Paragraph 3 specifies that Code rights exist when a landowner enters into a written agreement with a Code operator and the intention is for both parties to grant Code rights. The Code rights are as follows:

(a) to install electronic communications apparatus on, under or over the land,
(b) to keep installed electronic communications apparatus which is on, under or over the land,
(c) to inspect, maintain, adjust, alter, repair, upgrade or operate electronic communications apparatus which is on, under or over the land.

Maidens and Clarke (2017) consider “Code rights” to be similar to the rights associated with licences insofar as they provide the right to do something on a person’s land for a specified period but do not provide exclusive possession. Pink (2018) agrees that the Code rights allow the operators to locate their equipment on land but does not allow them to surround their compounds with fencing. Babcock Group (2012) suggests that this may cause the operators problems because most mobile phone masts are located within secure compounds due to health and safety reasons. Pink (2018) disagrees with this point and demonstrates that highway sites disguised as lampposts do not require perimeter fencing.

If it had been the intention of parliament to grant the operator exclusive possession then Paragraph 3, which sets out the Code Rights, would have most likely specified this. Since it does not, it is reasonable to assume that the operators are not entitled to exclusive possession. Furthermore, the site provider’s argument is relatively strong because they have demonstrated that mobile phone sites do not need to be located in secure compounds; therefore, it will be difficult for the operator to hide behind the “health and safety” argument.

Where a compound does exist, it is likely to have been used to set out the operator’s demise in accordance with their lease. This means that if the operator wishes to pursue an agreement under the new Code relating to an existing site then they will need to remove any associated fencing. This situation is likely to be problematic for them based on the number of sites they have.

2.3 Site sharing

The term ”site sharing” refers to the situation where one operator allows another operator to “add” equipment to their existing telecommunications mast usually in form of antennae being added to the head frame and a walk-in cabin, or a number of smaller cabinets, located at ground level. If the operators are not connected commercially then they are not able to share the same antennae, or ground based equipment, as to do so causes problems surrounding ownership and ongoing maintenance.

Under the old Code, the operator was entitled to share their site in accordance with the existing lease. Most leases were restrictive and site sharing was allowed, including the adding of equipment, provided a percentage of the incoming site share fee was paid to the landlord. This amount usually equated to around 30% and was known in the industry as a ‘payaway’.

Under the new Code, Paragraph 17 specifies that the operator is allowed to upgrade or share the electronic communications apparatus to which the agreement relates provided that:

– there is no additional burden placed on the landowner, and;
– subject to the upgrading or sharing having no more than a minimal adverse impact on the appearance of the existing apparatus.

An additional burden is defined as anything that has an adverse effect on the other party’s enjoyment of the land or causes additional loss, damage or expense to that party. This approach is being called the “two-step test”. Furthermore, this new site sharing provision is not retrospective insofar as it does not apply to subsisting agreements and will only apply when subsisting leases/agreements are renewed, or a new contract is entered into.

This new provision allows the operators to update their networks when new technology becomes available (DCMA, 2014; House of Commons, 2016). Thornton-Kemsley (2012) welcomes this concept and highlights that site sharing often helps the operator comply with regulatory pressures, allowing them to provide access to their infrastructure, as well as minimise the negative impact on the environment. According to DCMS (2016), “Upgrading to new generations of technology as fast as possible helps to maximise economic and social benefits from new digital services.” However, according to Radley-Gardner (2017), the installation of additional equipment is likely to place extra loading on rooftop sites and increase the number of times a site is visited for maintenance purposes. He also suggests that both these issues are likely to cause the landlord problems which will lead to them seeking high levels of compensation. Furthermore, Pink (2018) emphasises that the new site sharing provision does not provide the operator with the right to “add” equipment, and certainly not at ground level, as to do so would imply that the operator enjoys a legal demise which it does not.

Radley-Gardner (2017) presents a strong argument because there is evidence in the industry of increased levels of maintenance visits as a result of equipment being added to rooftops and ground-based masts; therefore, the site providers are considered to be in a strong position to build a compensation case. Ultimately, however, a decision from the courts will offer further clarity in this area. Pink (2018) also has a strong argument because the word “add” is not contained in the definition of Code Rights. In addition to this the “two step test” is subjective which will no doubt lead to confliction between the operators and landowners. It would appear that the drafting of the site sharing provision demonstrates a lack of practical understanding regarding the dynamics of telecommunications sites and the way they are shared.

2.4 Imposition of Code rights

Paragraph 20 specifies that the operator can serve a notice on the landowner setting out the Code rights and all the other terms of the agreement that the operator seeks. The notice must state that the operator seeks the landowner’s approval to the terms. The operator may apply to the court for an order if the landowner does not agree to be bound by a Code right within 28 days.

The Paragraph 21 test

Under Paragraph 21, the court will consider imposing an agreement if it thinks the following conditions are met:

– The prejudice caused to the relevant person by the order is capable of being adequately compensated by money.
– The public benefit likely to result from the making of the order outweighs the prejudice to the relevant person.
– In deciding whether the second condition is met, the court must have regard to the public interest in access to a choice of high-quality electronic communications services.
– The court might not make an order under paragraph 20 if it thinks that the relevant person intends to redevelop all or part of the land to which the code right would relate or any neighbouring land, and could not reasonably do so if the order were made.

The above conditions are being called the “Paragraph 21 test”. The operators may find this test to be problematic. For example, if the site provider can prove that the public already has access to “a choice of high-quality electronic communications services”, then the operator may find it difficult to impose an agreement. Public data are available in the form of coverage maps that show the extent of mobile coverage geographically from the main network providers; therefore, it should be relatively easy for a site provider to build a strong case to support his argument. Also, the provision relating to re-development is likely to incentivise site providers to re-develop their land. An example of this might be for solar panels on rooftops, or storage compounds at industrial premises. If a site provider can prove their intention is to re-develop their land then they will be putting themselves in a stronger position to resist an imposed agreement.

2.5 Valuation of consideration (rent)

If the Lands Tribunal makes an order to impose an agreement, Paragraph 24 sets out the basis on which consideration (rent) is assessed.

Paragraph 24 specifies that:

The amount of consideration payable by an operator to a relevant person under an agreement imposed by an order under paragraph 20 must be an amount or amounts representing the market value of the relevant person’s agreement to confer or be bound by the code right (as the case may be).


The market value must be assessed on these assumptions—
(a) that the right that the transaction relates to does not relate to the provision or use of an electronic communications network;
(b) that assignment and upgrading and sharing do not apply to the right or any apparatus to which it could apply;
(c) that the right in all other respects corresponds to the code right;
(d) that there is more than one site which the buyer could use for the purpose for which the buyer seeks the right.

At first sight, assumption (a) above makes the court’s assessment of consideration comparable to the Pointe Gourde Principle (‘no scheme rule’) found in compulsory purchase (see Pointe Gourde Quarrying & Transport Co Ltd v SubIntendent of Crown Lands (Trinidad) [1947] AC 565). In this case, a stone quarry was compulsorily purchased to facilitate the establishment of a naval base in Nigeria. The Crown acquired the quarry to build the naval base and the market value of the quarry would have increased due to the proposed naval base, but the additional value was not accounted for in the assessment of compensation.
Furthermore, a definition of the ‘no scheme rule’ was provided in Stebbing v Metropolitan Board of Works [1870] LR 6 QB 37, 42 (the graveyards case), in which Cockburn CJ stated:

“When Parliament gives compulsory powers and provides that compensation shall be made to the person from whom property is taken, for the loss that he sustains, it is intended that he shall be compensated to the extent of his loss; and that his loss shall be tested by what was the value of the thing to him, not by what will be its value to the persons acquiring it.”

Thornton-Kemsley (2012) argues that the Code should not be compared to the law surrounding compulsory purchase because there is no direct reference to and makes reference to a similar situation that occurred in Mercury Communications Ltd v London and Indian Dock. Investments Ltd [1993] 69 P&CR 135). In this case, Mercury wanted to lay electronic communication cables under a road in the Isle of Dogs which was owned by Lidl. The sole issue to be determined was the ‘consideration’ that the operator would be required to pay under the Code. Mercury argued that compulsory purchase principles were applicable and that under those principles only the value of the land to Lidl could be considered, arguing that any increase in the value of land based on Mercury’s proposed works had to be ignored, which meant that the value of the land was nil. Lidl argued that the compulsory purchase principle did not apply, that the rights were, in fact, equivalent to a ‘ransom strip’ of the kind identified in Stoke v Cambridge Corporation [1952] 12 P&CR 77, and that Lidl was entitled to a percentage share in Mercury’s anticipated profits.

The judge held that compulsory purchase principles did not apply because the Code did not expressly incorporate the compulsory purchase legislation and the applicable principles were instead those derived from the words “willingly”, “fair” and “reasonable”.

The above argument is a relatively robust because Paragraph 24 does not refer directly to ‘compulsory purchase’. Nevertheless, there are similarities between Paragraph 24 and the methodology used in compulsory purchase which cannot be ignored.

There is another argument being made as to whether the operators can adopt the new valuation approach before making an application to the Lands Tribunal (Pink, 2018). Again, this is a strong argument because the statute specifies that the new valuation approach is only applicable when an order is made by the court. On the other hand, and without guidance to indicate otherwise, it is difficult to understand what other approach the operators are expected to take.

The operators have already started assessing rents based on the new methodology which has resulted in them offering much lower rents. Taking a farmer’s field as an example, under the old Code, the farmer could expect to receive around £6,000 per annum in rent. Under the new Code, the operators are disregarding the use of the land for electronic communications and are valuing the land based on its agricultural use at around £15 per annum.

This approach is likely to result in surveyors trying to find alternative uses for their client’s land in order to try and increase the value attributed to it. The question is, what else could the land be used for? There are talks of land being used for wind turbines, solar farms, weather stations, or even landing ports for drones on rooftops. While this might be possible, the planning that would be required for some of these schemes might be difficult to obtain.

Another implication involves subsisting agreements which are subject to unconditional break clauses. In such cases, the operators may have the ability to break their lease and grant a new agreement within 28 days under a much lower rent. If the landowner refuses to cooperate then the operator could simply apply to the court and attempt to impose Code rights. If the application is successful, the rent payable to the landowner would be assessed under the ‘no scheme’ rule. In this situation the mast could potentially remain in situ at a fraction of the cost to the operator.

Furthermore, the operators could use their powers as a threat to install a site on neighbouring land in an attempt to reduce rents on their existing sites. While this may appear somewhat underhand, the operators have been known to take this course of action in similar situations.

Also, if the operators chose to impose an agreement, bearing in mind they are not entitled to a legal demise, they would need to submit detailed plans as part of their application to the courts. Therefore, if the operator then wished to deviate from those plans, they would need to submit a further order to the Courts. By not doing so, any deviation could potentially lead to a breach of their original order. This is likely to be problematic for the operators based on the amount of upgrading that a site requires over its lifetime.

Due to the lack of guidance from professional bodies such as the RICS, it is difficult to determine what the intention of the Code is. One thing is for certain, the site providers will not agree to the levels of rent currently being offered by the operators. On the other hand, the operators are not likely to back down and increase rents above what they believe they are entitled to pay under the new Code. This leaves three options (1) the industry waits for cases to be decided by the Lands Tribunal to ascertain their interpretation, (2) the relevant provisions are amended by the government, or (3) a compromise is reached by both parties.

As it stands, the industry is waiting for rulings by the courts and there is also talk of the operators seeking revisions with Ofcom . It is important to add that a determination by the courts, or an amendment to the Code, in favour of the operators, could have a devastating impact on landlord and tenant relationships which is only likely to make things worse in the long run.

2.6 Compensation

Under the new Code, Paragraphs 25 and 84 specify that the courts may order the operator to pay compensation to the landowner for any loss or damage that has been sustained, or will be sustained, as a result of the exercise of the code right to which the order relates.

Where an agreement is imposed, or apparatus is removed, depending on the circumstances, the court has the power to order the payment of compensation for loss or damage for—

(a) expenses (including reasonable legal and valuation expenses, subject to the provisions of any enactment about the powers of the court by whom the order for compensation is made to award costs or, in Scotland, expenses),
(b) diminution in the value of the land, and
(c) costs of reinstatement.

Paragraph 84 also specifies that rules (2) to (4) as set out in section 5 of the Land Compensation Act 1961 will apply regarding the compensation for diminution in the value of land.
Compensation following a compulsory acquisition of land is based on the principle of equivalence (see Horn v Sunderland Corporation [1941] CA). This case law demonstrates that a landowner should be no worse off in financial terms after the relevant scheme has taken place, and conversely they should be no better off.

There appears to be very little difference between the old Code and the new Code; they both compensate the landowner for loss based on the burden caused by the scheme taking place. However, the site providers do not wish to be compensated for their loss but rather they require a price over and above that amount (Goodacre, 2018). The operators suggest that they are willing to compensate the landlord for the burden of Code rights at levels that are likely to appease them (CTIL, 2018). According to Thornton-Kemsley (2012), this does not make sense because the operators have already adopted the compensation approach in their valuations of rent and it is not possible to compensate someone twice for the same loss.

The problem is that ‘consideration’ and ‘compensation’ appear to overlap. The site provider is demanding a price (rent) under Paragraph 24 over and above that of compensation, and the operators are trying to compensate the site provider for the same burden under Paragraph 25. This has caused confusion and while an interpretation from the courts will be welcomed it does not resolve the problem regarding landlord and tenant relation if the decision were to fall in favour of the operator.

2.7 Termination and right to remove 

Under the old Code, if a lease was not protected by the Landlord and Tenant Act 1954 then the landlord could serve the operator with a Notice to Quit on the expiry or break of their lease. Alternatively, they could serve a notice under Paragraph 21 where a ‘Lift and Shift’ clause was exercisable. ’Lift and Shift’ clauses are specific to telecom leases and allow landowners to repair and maintain their rooftops. If the operator wished to remain in occupation, they were required to serve the landlord with a counter-notice within 28 days of the notice. In which case, the only way the landlord could terminate the agreement and remove the operator’s equipment was by making an application to the courts.

Under the new Code, the landowner is required to serve the operator with 18 months’ notice at the time the lease expires, or at the time a break clause is exercisable, stating one of the following grounds for termination:

– A substantial breach by the operator
– Persistent delays in payment by the operator
– Redevelopment by the landowner
– The operator does not meet the Paragraph 21 test

To remain in occupation the operator must serve the landowner with a counter-notice within 3 months of the landowner’s notice stating they do not wish for the agreement to end. They must also apply to the court within three months of the first day of their notice to the landowner seeking continuation of their Code rights under Paragraph 34. If the court determines that the landowner has satisfied one of the above grounds, then they will order the removal of the operator’s equipment.

There is very little in the way of written evidence to suggest that either party hold a strong opinion in this area of the new Code. Nevertheless, it is worth noting that the grounds for termination might act as a deterrent to landowners whom otherwise would have offered their property as a potential site. This is something that would have posed more of a problem had the operators not gained the right to impose an agreement under Paragraph 21.

Under the new Code, the rents on offer are far lower than before; therefore, the landlords will be incentivised to redevelop. It will almost certainly be in the landowner’s interest to take this course of action. This will probably lead to the operators receiving more termination notices. However, landlords will need to prove settled intention similar to the grounds for redevelopment found in the Landlord and Tenant Act 1954. It could be argued that simply reverting a site back to its original use (prior to the mast being in situ) might be considered a form of ‘redevelopment ‘ – an interesting concept, and one for the Local Planning Authority to determine.. But the problem does not stop there – if the operator receives a termination notice then they will need to find an alternative site, but very few neighbouring landowners are likely to accept the levels of rent being offered under the new Code. This will probably lead to the operators attempting to impose Code agreements on those neighbouring landowners which could be a long and costly exercise.

2.8 The Landlord and Tenant Act 1954 

Under the old Code, if a lease was not contracted out of the Landlord and Tenant Act 1954 then it could only be terminated by following the statutory framework according to that act.
Under the new Code, where the purpose of the new agreement is to grant Code rights, the Landlord and Tenant Act 1954 does not apply which means it is no longer necessary to expressly exclude the security of tenure provisions at the time an agreement is executed.

Widen and Dods (2017) refer to the previous relationship between these two statutes as, “uneasy bedfellows”. They further add that the duplication of these two statutory regimes had previously made it difficult for landlords to remove the operators.

The removal of joint statute protection is likely to be viewed as a step in the right direction for both parties. However, in terms of the delays being encountered in the market, this reform appears to present minimal significance.

2.9 Summary 

The literature review has described and critically evaluated the key reforms under the new Code. It has revealed that the new valuation methodology presents the greatest challenge and appears to be the main cause of the delay in the market. However, in addition to this it has demonstrated that the site sharing provision also appears to be highly contentious and therefore requires further investigation.

Therefore, to gain a better understanding of both party’s bargaining strength, which in turn will indicate the level of compromise that may be accepted, it will be necessary to obtain primary data which will allow the researcher to investigate areas which are not yet fully understood.

The following chapter will set out the research strategy which was devised to assist in meeting this objective.


This chapter discusses the research strategy and data collection techniques used in this research. Details of the site and sample are provided and the framework for analysis is addressed. Finally, the validity and reliability of the study is considered, and potential problems and weaknesses are also discussed.

3.1 Research focus

While the literature review has provided a good foundation for this research, it lacks the depth required to provide adequate recommendations to meet Objective 4. The literature review has revealed a lack of written material from the operator’s perspective; therefore, in order to gain a balanced view, and academic credibility, the collection of empirical data was considered essential. The literature review revealed that the site sharing provision is equally as contentious as the new valuation methodology and therefore requires in depth investigation. Finally, while there is some material available from the government, it appears to lack practical understanding in the subject; therefore, the collection of primary data from active members in the industry is considered essential.

To clarify further, the literature review has highlighted the need to answer the following questions:
– Do stakeholders consider Code rights to be adequate for their purpose?
– What are the stakeholder’s views on timeframes for the market to adjust?
– Will precedents set at Lands Tribunal have any bearing on the market?
– Will professional costs play a role in the market moving forward?
– Are rural ‘not spots’ and ‘ransom rents’ relevant?
– What are the stakeholder’s views regarding a compromise?

3.2 Research strategy

This section explains which research approaches were considered and why, in most cases, they were discounted.

Firstly, the use of a Case Study was considered. Case studies involve, “studying one example of a particular type of something” (Biggam, 2016). This type of approach was considered inappropriate because mast sites are heterogeneous resulting in each case being different. Therefore, the outcome of one case study would lack validity in the telecommunications industry, and the researching community in general.

Ethnography involves the scientific description of people and cultures with their customs, habits, and mutual differences. This research approach was not considered appropriate because the subject comprises a legal process and while it could be argued that a person’s reaction to that particular legal environment is being described, it does not involve meeting, observing and interacting with those subjects. Ethnography was discounted on that basis.

Next, experimental research was considered. Experimental research involves the testing of a hypothesis and is usually conducted in a scientific environment. This research is not trying to test an explanation, or a theory, and could not, therefore, be examined in a scientific study – the Code is subject to an ever-changing market comprising a large number of variables. This approach was therefore considered inappropriate and discounted on that basis.

Historical research is related to events that have happened in the past. As the name suggests, the “new Code” has only recently been implemented and while there is an element of historical evidence which will be relevant to this research, one of the objectives involves obtaining stakeholder’s views at the present time and another aims to predict what will happen in the future. On that basis, historical research was discounted.

Action research involves identifying a problem in a working environment and attempting to solve it through research. The author is engaged in the telecommunications market; however, it would not be possible to test a hypothesis in their working environment. Similar to the case study, it is not possible for a single party to have significant impact on the market because it takes time for trends to evolve which are then adopted by the market as a whole. While the actions of one individual may be the result of a response from another, it is unlikely to have any bearing on which direction the market is taking. On that basis, action research was discounted.

The final strategy to be considered was that of grounded theory. This involves selecting an area of research without setting specific objectives. The next stage involves carrying out empirical research and the results of that research lead the author to conduct a review of literature. This type of approach was discounted because the objective of the research was identified from the outset.

Interviews were considered the most appropriate method for obtaining the empirical data required for this research. According to (Denscombe, 2010), interviews have the potential to exploit and explore complex phenomena. This was considered important because the new Code is complicated requiring in-depth and personal views being obtained from the interviewees. Furthermore, interviews were considered the most convenient means of obtaining data which was considered important based on the interviewee’s roles in the workplace.

Quantitative research involves collecting data which can be quantified, whereas qualitative research relates to in-depth exploratory issues where the opportunity for ‘quality’ responses exist (Biggam, 2016). It is often wrongly assumed that specific research strategies fall under either qualitative or quantitative research (ibid.). This research is aimed at understanding what is causing the delay in the communications market, and what can be done to prevent it from continuing to happen. It was clear that this would involve asking questions requiring in-depth answers. Therefore, the empirical research section primarily comprised qualitative data. Nevertheless, it was acknowledged that an element of quantifying might be necessary. For example, one of the questions asked was, “would you consider redeveloping your property if the operator offered you a reduction in rent”. While this question was likely to provoke a detailed response, it could also be quantified. On that basis it was not considered appropriate to categorise this research into either qualitative or quantitative analysis; instead, it is a combination of both. One major criticism of qualitative data collection is the fact that it can be difficult to replicate (Foddy, 2009). It was therefore considered essential that this study followed a clear and systematic process.

3.3 Data collection 

The method used to collect the data has been presented. This section provides more detail regarding the interview process, clarifying where the data was collected from, the size of the sample, the sampling technique, and how the data was extracted and stored.

This research sits in the telecommunications market; therefore, it made sense to focus on individuals working in that sector. The individuals associated with the telecommunications market are surveyors. Therefore, to add credibility to this research, only surveyors with extensive experience in the telecommunications market were chosen. Where possible, those surveyors were members of the Royal Institute of Chartered Surveyors (RICS). The literature review highlighted that the site provider’s agents have published most of the written material; therefore, to strike an appropriate balance, it was vital to gain the operator’s opinions. Initially, the operators were reluctant to take part in this research. Fortunately, however, a number of their agents and valuers agreed to participate. Other respondents included one of the main operators, a site provider and a number of agents, as well as a solicitor whom specialises in telecommunications. A full list of the interviewees and details of their backgrounds can be found in Appendix B.

Group interviews involve discussing subjects at length between the interviewees which can lead to a more in-depth conversation; however, one of the problems with this approach is that individual members of groups can place unwanted bearing on the direction of a discussion (Denscombe, 2010). Face to face interviews can be held relatively easily from most workspaces, particularly with the aid of Skype and other media applications (Biggam, 2008). Therefore, in this instance, it was deemed appropriate to use face to face interviews using Skype for convenience. Where Skype was not accessible, the interview was held over the phone and recorded using a Dictaphone. The data was saved on a cloud-based drive.

According to Foddy (2009), semi structured interviews using open questions allow respondents to express themselves in their own words which allows a clear indication of their strength and feelings to be obtained. Open questions allow conversation to flow whilst closed questions provide fewer variable results but make analysing the questions quantifiable and therefore potentially easier to analyse (Thomas, 2006). Semi-structured interviews using open questions were therefore considered to be the most appropriate method for this research due to the requirement to obtain personal and detailed responses from the interviewees. The questions were categorised into topics which were established from the findings of the literature review, namely, (1) experiences with the new Code (2) the definition of Code rights, (3) imposition of Code Rights, (4) site sharing, and (5) termination. It was evident from the literature review that the last theme relating to termination was the area of least concern to stakeholders. Despite this being the case, it was considered important to discuss this provision with the respondents to understand where it sits in this study.

Asking questions to obtain information in social research is widely accepted as a cost-efficient way of gathering information about past behaviour and experiences; however, this particular method is not without its criticisms. For example (Foddy, 2009) lists ten problems associated with it:

– Factual questions sometimes elicit invalid answers
– The relationship between what respondents say they do and what they do is not always strong
– Respondents’ attitudes, beliefs, opinion, habits, interests often seem to be extraordinarily unstable
– Small changes in wording sometimes produce major changes in the distribution of responses
– Respondents commonly misinterpret questions
– Answers to earlier questions can affect respondents’ answers to later questions
– Changing the order in which response options are presented sometimes affects respondents’ answers
– Respondents answers are sometimes affected by the question format per se
– Respondents often answer questions even when it appears that they know very little about the topic
– The cultural context in which an item is presented often has an impact on the way respondents interpret and answer questions

The questions were formulated having regard to the above criticisms. For example, the questions were unequivocal which prevented misinterpretation. Furthermore, by asking a relatively broad question in the first instance, the researcher was able to quickly understand the extent of the respondent’s knowledge thus allowing the researcher to alter the direction of the discussion if required. Finally, at no time did the researcher express his own opinion during the interviews. An example set of questions can be found in Appendix B.

3.4 Framework for data analysis 

Thomas (2009) describes the inductive approach as, “research that allows findings to emerge from the frequent, dominant, or significant themes inherent in raw data, without the restraints imposed by structured methodologies”. Whereas, a deductive analysis tests whether data are consistent with prior assumptions, theories, or hypotheses identified or constructed by an investigator. Thomas (2009) specifies that many evaluation projects use both inductive and deductive analysis. It could be argued that this research is attempting to test a hypothesis, i.e. that the new valuation methodology is causing a delay in the market. But that is not strictly the case, instead, it aims to clarify this theory, and go further by exploring what can be done to resolve the situation. On that basis the inductive approach was mainly applied during the course of this study which involved common themes being identified during the interviews which were then evaluated. For example, at one stage a number of the interviewees referred to the RICS and the lack of guidance that they had provided. The researcher investigated this further and found an interesting article published by the RICS, an extract of which can be found in the Findings chapter.

The empirical data were verified by adopting the method of triangulation. This meant comparing the primary data to the literature review, as well as observations made by the researcher in his role in the industry. This allowed the researcher to identify any inconsistencies. If the researcher considered parts of the data to be inconsistent or irrelevant, they were looked at in more detail to assess their credibility and validity. The data were then either discounted, or appropriate commentary was added in the Findings section. There is a drawback with triangulation, described by Denscombe (2010) as follows:

“Data analysis becomes more complex when using triangulation. Not only does the researcher need to use more than one kind of analysis, there is also the need to compare, contrast and integrate the findings in a way that is more demanding”.

The researcher attempted to overcome this criticism by ensuring they had much of the required knowledge required to undertake this research from the outset. Most of which was obtained during the course of their master’s degree at the University of the West of England.
The diagram below shows how triangulation was applied in the context of this study.

Figure 1. Methodolgical triangulation, based on Denscombe (2010).

3.5 Limitations and potential problems 

It is overoptimistic to assume that there are no problems associated with the methods of research described above; therefore, the next section explains which areas presented the researcher with the most challenges.

The researcher works as a consultant acting on behalf of the site providers. This in itself presented a number of problems.

Firstly, initial enquiries found that the operators did not wish to divulge information that may prejudice their position in the market. An element of professional trust and ethics played a part here. The researcher is a member of the RICS and is therefore subject to a Code of Conduct which provided the respondents with some comfort that their views would not be used against them in the workplace.

Secondly, to ensure the research was credible, it was essential that the researcher remained unbiased at all times which meant refraining from directing arguments to suit their own interests. This problem was managed through the continuous peer review of the research by persons acting on both sides.

Another problem involved validity. With the new Code in its infancy, the data entering the market needed to be monitored, particularly regarding the cases being dealt with by the Lands Tribunal. A determination in favour of the operator, for example, would have had a significant impact on the market in a relatively short space of time. This is difficult to manage but the researcher did their best to keep themselves fully updated throughout the course of the study. While it is not possible to receive email updates regarding court cases, there are a number of subscribed websites such as Practical Law and Gov.uk which provide legal updates on a more general level.This was considered the most effective way of managing this limitation. The researcher also kept in touch with a number of solicitors regarding the ongoing court cases.

As described above, the sample audience comprised qualified professionals working in the telecommunications industry. It is acknowledged that the telecommunications industry is expansive and comprises a number of niche sectors. Based on their role in the industry, the researcher had a reasonable expectation of the respondent’s knowledge surrounding the new Code; nevertheless, it was not possible to establish this conclusively until the interviews had started. This problem was identified from the start and was managed through quality sampling techniques, as described earlier.


The following chapter describes and critically analyses the responses received during the interviews. Each subsection is based on a theme which in some cases comprises more than one question. Details of the respondents and the pseudonyms applied in this chapter can be found in Appendix B.
Hereafter, the terms ‘respondent’ and ‘interviewee’ shall be used interchangeably.


MNO: Mobile Network Operator
SPA: Site Provider Agent
SPSOL: Site Provider Solicitor
SP: Site Provider

4.1 Experiences under the new Code

The interviewees were asked to describe their experiences with the new Code to date. This was considered a good starting point to determine the respondent’s depth of understanding in the subject.

The responses to the opening question were consistent. Most of the interviewees agreed that the market had stagnated since the new code was implemented and expressed their concerns over the impact this would have on the industry. MNO3 (2018) compared the reforms with recent changes in planning legislation which allowed the MNOs to increase the height of their masts from 12 metres to 15 metres under permitted development, resulting in a number of disputes surrounding the head-frames of the masts i.e. whether they should be considered as part of the structure. While this may not compare directly to the delays associated with the new Code, it does highlight the sensitivity of the telecommunications market.

The purpose of the code was rarely disputed during the course of the interviews; however, the site providers highlighted that the MNOs will make significant savings in rent under the new legislation. SPA2 (2018) criticised the government for not setting targets for the operators to meet and SPA3 (2018) added that the MNOs had promised their stakeholders an increase in share prices based on the new Code. These comments indicate that the MNO’s focus might have been to make more profit rather than to invest in their networks. MNO3 (2018) suggested that the legislation is misinterpreted by both sides and believed that both parties are acting unreasonably and should, “grow up”. This was an interesting remark indicating that the operators are also becoming frustrated with the situation.

4.2 Definition of Code rights 

The respondents were asked whether they consider the Code rights to be fit for purpose. SPA1 (2018) confirmed that the rights include what is necessary to install the apparatus required for a telecommunication site. However, in the case of a greenfield site, he considered that fencing does not form part of the apparatus and highlighted that the new Code allows the MNO to install equipment but does not give them the right to exclusive possession; therefore, the MNO is not entitled to surround the site with fencing. SPA3 (2018) added that this is not likely to cause the MNO a problem because anti-climb guards can be installed around their masts instead of perimeter fencing. SPA3 (2018) proceeded to give examples of sites located on the highway which are not situated within a secure compound. SPA3 (2018) insisted that if the MNOs value sites by adopting the ‘no scheme’ rule then they will be granted the rights as set out in the new Code, but nothing more. They will not be entitled to an interest in land, nor a demise and strictly no fencing. The MNOs and their agents were less willing to comment in this area but did express their concerns over the arguments being raised by the site providers.

The above emphasises the issues relating the definition of apparatus which are consistent with the literature review. This debate is crucial because of the number of sites that are already located within secure compounds. If the MNOs wish to renew agreements under the new Code then it would not be practical for them to remove the security fencing from all of their sites, nor in many cases would it be safe to do so. The argument regarding highway sites and the fact that they are not located within compounds does appear effective. This is likely to be a matter that will be determined by the Lands Tribunal. It will be interesting to see how the Code is interpreted in this area because to grant the operator the right to a secure compound would contradict the underlying principles of property law concerning exclusive possession. Furthermore, the MNO’s unwillingness to comment in this area suggests that they are not sure how to tackle this issue.

4.3 Site sharing

Code rights do not entitle the MNO to “add” equipment to their sites (SPA1, 2018; SPA3, 2018). Furthermore, SPA2 (2018) emphasised that the correct phrase is, “apparatus sharing” not, “site sharing”. The site providers held a strong opinion in this matter. MNO1 (2018) disagreed that equipment cannot be added and argued that this, “flies in the face of the new Code and its overriding purpose”. MNO3 (2018) raised an interesting idea regarding sharing, suggesting that all the telecommunications sites should be pooled and shared equally between the operators, similar to the railway network. While the latter is an interesting concept, it digressed from the subject and was therefore not pursued. SPA1 (2018) added that regardless of whether the new Code allows the MNO to “add” equipment, the additional burden to the site provider means that site sharing is unlikely to be permissible. He went on to provide examples of farmland where shooting takes place – claiming that maintenance people would disrupt this type of activity. He also referred to rooftops which would be adversely affected due to the additional loading. These comments coincide with the information obtained in the literature review where similar concerns were raised by Radley-Gardner (2017).

It is important to note that If the site sharing provision is interpreted ‘word for word’ then the MNOs cannot “add” equipment and if they cannot share their sites as they have done previously under the old Code then they may be forced to seek guidance from parliament or consider a compromise. On that basis, this part of the new Code appears to be the site provider’s stronghold.

4.4 Valuation of consideration (rent)

The respondents were asked to interpret the valuation provision in the new Code, and as expected, there was a significant difference in opinion.

MNO1 (2018) highlighted that the intended purpose of the new Code is to create savings that can be re-invested into the networks based on the concept that network coverage is becoming a fourth utility. SPA2 (2018) considered this to be a strange concept and questioned why a multi-national company should have the right to compulsory purchase land in order to save them large amounts of money. This is an interesting point and one that continues to be raised; if the newspapers obtained this story then it has the potential to cause a public outcry.

MNO3 (2018) stated that there has never been any specific valuation methodology relating to the Market Rent of mast sites and referred to the telecommunications market [under the old code] as a “horse trade”. He suggested that some agents are incompetent in valuation and provided an example of them attempting to value sites based on the amount of traffic [mobile calls] that run through them. This relates back to earlier comments made by the MNOs during the consultation period of the new Code concerning ransom rents; however, to date there appears to be limited evidence to support such claims.

During the interviews, the MNOs consistently held that the valuation provision is based on the underlying value of the site provider’s land. They claimed that the only way that a site provider could hope to achieve payments closer to the rents paid under the old Code would be through a claim for compensation under Paragraphs 25 and 84. SPA1 (2018) argued that the MNO’s valuations are oversimplified and highlighted that they appear to be focussing on a single point of Paragraph 24 (the disregard of the scheme) to meet their needs. He went on to say that ‘market value’ is the price of the site provider’s agreement to be bound by Code rights, and the MNOs are failing to recognise this concept. SPA3 (2018) was asked to explain how this value should be determined. He provided the example of a rent saving exercise carried out by CTIL ten years ago which involved the consolidation of Telefonica’s and Vodafone’s networks. CTIL wrote to landlords and threatened to remove their mast sites if they did not accept a reduction in rent from £5,000 to £3,000 per annum. At this level, the landlords told the MNOs to remove their masts and SPA3 (2018) claims that this provides a clear example of the price a landowner is willing to accept to be bound by a Code right. He then emphasised that Paragraph 24 has got nothing to do with the underlying value of the land and went on to say:

“The underlying value might influence the landowner regarding the price he seeks for an agreement, but all we are trying to assess under paragraph 24 is the price that the landlord will accept to do a deal.”

Regarding the ‘scheme’, SPA1 (2018) claimed that it is entirely irrelevant whether the MNO’s mast is turned on or not. He supported his view by describing an arbitration case involving the valuation of rent of a navigation beacon which would not fall under the definition of an “electronic communications network”. In this case, the arbitrator found the navigation beacon to be comparable to a mobile phone mast. This indicates that there might be an argument to say that the value attributable to mast sites is not heavily influenced by the provision of the use for electronic communications purposes.

The site provider’s arguments concur with the wording of the Code. According to Paragraph 24, consideration (rent) is: “the amount or amounts representing the market value of the landowner’s agreement to be bound by the Code right.”

It is important to note that the above wording does not specify the market value of “land”; moreover, the market value of “the landowner’s agreement”. Therefore, it does raise questions as to why the MNOs are trying to value the underlying value of the site provider’s land in the first instance.

In general, the site providers argued that, regardless of how the new valuation methodology should be applied, the MNOs should not be applying this in their initial negotiations (SPA1, 2018; SPA2, 2018; SPA3, 2018). They went on to say that nowhere in the Code does it specify that the ‘no scheme’ rule is applicable other than when an agreement is imposed on a landowner. They referred to the Code of Best Practise which states that:
“Although the Code provides a mechanism for the court to impose terms of occupation on the Landowner and the MNO, the parties should make every effort to reach voluntary agreement first.”

The views held by both parties carry sizable weight. The MNO’s comments correspond with formal publications from DCMS (2018) and bearing in mind that DCMS are responsible for regulating the industry, you would expect them know what the true intention of the Code is – or does this simply imply a disconnect and lack of communication in the industry ? – an ironic thought. On the other hand, the site providers also seem to have a strong argument as they are correct in demonstrating that the ‘no scheme’ part of the valuation should not be exaggerated in an attempt to achieve a particular result. They are also correct in referring to the Code of Best Practise because the courts are likely to revert to this guidance bearing in mind there is no other guidance available at the present time.

75% of the site providers (including their agents) were accepting of a compromise, stating in most cases that they would be willing to consider a rent reduction in line with research previously undertaken by Nordicity which predicted rent reductions of 40% (Nordicity, 2015). In most cases the MNOs refused blankly that a compromise at this level would be agreed to. They lay claim that the compensation element of the new Code will provide the site provider with sufficient levels of payment in accordance with the new Code. While in some instances the MNOs were sympathetic over the site provider’s position, they continued to justify their stance based on one of the underlying principles of the new Code which is to reduce the MNO’s operational costs (DCMS, 2016).

The data collected from the interviews resulted in a new idea being established which will now be explained.
Paragraph 24(1) specifies that:

The amount of consideration payable by an operator to a relevant person under an agreement imposed by an order under paragraph 20 must be an amount or amounts representing the market value of the relevant person’s agreement to confer or be bound by the code right (as the case may be).

Up until now the operators have valued their sites based on the underlying value of their existing demises granted under their subsisting leases. This approach appears to be flawed. It is important to note that the market value is that of the relevant person’s “agreement” and not the market value of the relevant person’s ‘land’. Therefore, why are the operators valuing an area of land, and what is the value of the “relevant person’s agreement”?

The primary data indicates that the market value of the “relevant person’s agreement” is the amount the person would be willing to accept to have a telecommunications site located on their land – which is equal, in most cases, to the level of rent they had demanded under the old Code.

In regard to the ‘no scheme’ rule, Paragraph 24(3)(a) specifies that:

The market value must be assessed on these assumptions –

– that the right that the transaction relates to does not relate to the provision or use of an electronic communications network

It would appear that this part of the provision simply prevents sites from be valued higher than other sites based on the level of traffic that runs through them, which in turn removes the site provider’s ability to hold the operator to ransom. In other words, it standardises rents across all sites. However, the level of rent still needs to be assessed based on “the market value of the relevant person’s agreement to be bound by the Code Right”. Again, what is this value? Well, if the site provider did not hold the operator to ransom in the first instance insofar as a premium was not paid based on the site’s importance then there is a strong argument to say that the rent should be the same as it was under the old Code. This concept is unique but appears sensible considering one of the reasons for the new Code was to prevent ransom rents.

The extent to which Part 4 of the new Code can be interpreted demonstrates poor drafting. It would appear that both parties are in deadlock until relevant case law becomes available, but even then, it is unlikely that the site providers will accept such low rents. In the meantime, the industry will not progress unless a compromise can be reached. While both parties hold strong arguments it the intention of the code to save the operators money (DCMS, 2016) cannot be ignored. The only reasoning behind this could be that parliament decided against the idea of the traditional ‘no scheme’ rule, hence why they have not allowed the operators to purchase land. Nevertheless, objective (4) aims to propose recommendations to allow the market to advance. During the interviews, the site providers were receptive to reductions of 40%. This would result in the rent of an average rooftop site falling from £11,000 to £6,000 per annum and a greenfield site from £5,000 to £3,000 per annum. At these levels the site provider may appear to be losing out; however, there is clear indication that the new Code was aimed at cutting the MNO’s operational costs and as it stands the MNOs appear unlikely to back down. Rather than risk having rents reduced by 99%, a well advised site provider would probably accept a rent at this level.

4.5 Compensation

MNO3 (2018) suggested that the operators may be agreeable to pay compensation (but not rent) to the site providers at, “levels that would appease them”. This suggests that the MNOs are willing to disguise compensation as consideration (rent) in an attempt to reduce costs, albeit it in an indirect way. The MNOs face a risk adopting this strategy. If the MNOs were to impose a Code agreement in relation to rooftop site in London then the compensation that would be payable could potentially be well above the level of rent they would have paid under the old Code. For the time being, it seems that the MNOs are prepared to take this risk.
According to SPA2 (2018), the MNOs are attempting to compensate landlords twice. Firstly, in relation to consideration (rent), under Paragraph 24, and secondly for the burden of the proposed scheme under Paragraph 25. SPA3 (2018) agreed that Paragraph 24 does not use the word, ‘compensation’ and confirms that, according to the laws of compulsory purchase, a person cannot be compensated for the same loss more than once.

In most cases, the landowners appear to have no desire in being compensated for loss – they require a price – but as it has already been demonstrated, the confusion surrounding how this price is established continues to be disputed. Once again, this part of the Code is likely to require interpretation by the courts, unless a compromise can be agreed.

4.6 Betterment value

MNO3 (2018) raised an interesting point regarding betterment value. In his view, the siting of a mast could potentially increase the value of a person’s land above its current value. Betterment can be defined as:
“the enhancement in the value of land resulting from the actions or decisions of central or local government or by a statutory body, or from the expectations of such actions or decisions” (RICS, 1975).
As it stands, there is very little evidence to suggest that individual properties are worth more based upon connectivity or coverage; therefore, in reality, it is unlikely that betterment will be accounted for in any claim for compensation by the landlord. Relevant case law in this matter includes: Eastern Railway v London County Council [1915]. In this case, Lord Cozens-Hardy MR and Warrington LJ both agreed that there was no provision in the enabling Act for considering betterment.

4.7 Timeframes

When the respondents were asked how long they considered it would take for the market to stabilise they indicated between 6 months and 2 years. As expected, this was very much guesswork; nevertheless, the range of responses was considered noteworthy.

4.8 RICS guidance

The respondents were asked whether they considered RICS guidance would be forthcoming and what level of assistance it would provide.

80% of the respondents agreed that the guidance from the RICS is long overdue and that it should have been made available from the day the new Code came into effect (or before). 60% considered that the guidance is likely to be vague and will therefore not offer sufficient clarification (MNO2, 2018). SPA1 (2018) raised concerns that the MNOs might have the majority say in the guidance which would result in the advice being “ineffectual”. 85% of the respondents agreed that the courts are likely to consider RICS guidance when making a ruling.

MNO3 (2018) confirmed that the RICS have already made a statement concerning the valuation of consideration under the new Code, as follows:

“Market Value under the code (when it comes to the imposition of an agreement) differs from the market value as defined in VPS 4 Section 4 to the extent that certain prescribed assumptions have to be made. The fact that the code defines the basis of value to be used in this way is not an issue. The critical point for RICS professionals is that you have to bear in mind that strictly the “asset” for this purpose is the “relevant person’s agreement to confer or be bound by the code right (as the case may be)”. Concerning that, it is generally better to tie matters back to the legislation, i.e. to the code itself.”

The above statement simply affirms that the Code takes precedent over the definition of Market Value provided by the RICS. While this offers a degree of clarity in this particular area it falls short on the whole.
Clearly, the RICS guidance will be welcomed by the industry, unless it is heavily biased; however, there is no evidence to suggest that this should be the case. The RICS have a telecommunications forum which is represented by a range of stakeholders from both sides allowing for a balanced view to be obtained during consultation. The respondents indicated that the guidance will be available from April 2019. Unfortunately, the cases that have been taken to the Lands Tribunal to date are likely to have been determined by that date. This is unfortunate because without RICS guidance the Lands Tribunal will be left to their own devices which generates increased levels of uncertainty.

4.9 Precedents 

The idea of precedents being set at the Lands Tribunal raised some interesting comments. In general, both parties agreed that rulings from the courts will be welcomed. However, many of the respondents also acknowledged that the rulings would carry little weight regarding comparable evidence in the open market.
According to SPA2 (2018), if the courts determine that rents should be reduced by 99% then this is likely to have a negative impact on the market. He indicated that the site providers would, “put up barriers”, and that access to sites would not be forthcoming. SP1 (2018) stated that he would not agree to a decrease in rent and was adamant that if he were forced into an agreement at a lower rent, then he would make life very difficult for the operator (his tenant). He indicated that he would block access and attempt to redevelop his building, even if that meant simply by adding a new roof, i.e. one that could not accommodate telecommunications equipment.

4.10 Not spots 

One of the main reasons the new legislation was implemented was due to poor coverage in rural areas, otherwise known as ‘not spots’. The respondents were therefore asked for their opinion in this area.
According to MNO1 (2018), Ofcom should have set the operators targets relating to areas with poor coverage. He also stated that one of the deciding factors in the acquisition of a site is the predicted amount of data that will pass through it. He further acknowledged that this is a cultural process and one that is deeply rooted. MNO3 (2018) believed that the operators will have to fill in ‘not spots’ because, “the reasons for them not doing so are slowly being eroded”. He also highlighted other problems associated with rural areas, for example build costs, and electricity links across third party land, all of which contribute significantly to the MNO’s costs. This coincided with comments made by SPA2 (2018) regarding the MIP project. This scheme involved the MNOs being provided a large sum of money by the government in order to build 400-500 sites in rural ‘not spots’. The MNOs approached landowners claiming that they needed to acquire sites in areas with low coverage but could only pay low rents for them. SPA2 (2018) emphasised that the operators received good response from the landowners. However, it turned out that the main problem was connecting the site to an electricity supply as opposed to the rent.

SPA3 (2018) stated that he has at least twenty sites where ‘new code agreements’ have been proposed but not one of those involves a ‘not spot’. In his view the MNOs are focussing their attention on minimising rents on existing sites in an attempt to maximise profits as opposed to filling ‘not spots’.

The above indicates that if ‘traffic’ plays such a large part in the MNO’s decision-making process then coverage in rural areas is not likely to improve, unless Ofcom set the operators targets over specific timeframes which carry suitable penalties for non-compliance.

4.11 Ransom rents

The respondents were asked whether they believed that ransom rents are prevalent in the industry. The general opinion was that the MNOs have been held ransom in the past, but this only happened on a small number of cases (SPA1, 2018; SPA2, 2018, MNO1, 2018; MNO2, 2018). The interviewees acknowledged that the changes to the Code may remove the risk of ransom rents, but they did not consider this to a valid reason for the implementation of the new Code. Therefore, it seems that ransom rents should not have been a deciding factor on which to base the new Code.

4.12 Human rights 

Protocol 1, Article 1 protects a person’s right to enjoy their property peacefully. The respondents were therefore asked whether they believed that the new Code contradicts this law. The interviewees held that the new Code is likely to be compliant in this area because it clearly states that an agreement can only be imposed on a landowner if it is in the public’s interest. Where it is found not to be, the court will not impose an agreement (MNO1, 2018; MNO2, 2018; SPA1, 2018; SPA2, 2018; SPA3, 2018, SPSOL, 2018). It is therefore considered that these two statutes will not contradict one another.

4.13 Costs

The costs involved in taking a case to the Lands Tribunal could act as a deterrent to either party, the respondents were therefore asked for their opinion in this matter.

According to SPA2 (2018), under the principles of compulsory purchase, the MNOs should pay the site provider’s reasonable professional fees. He then stated that the operators have been unwilling to provide an undertaking for such costs which is another reason why the market has stalled. According to SPA3 (2018), a Landowner is entitled to reasonably protect his position and in those circumstances he should not be punished for doing so and the costs for his representation, unless he is taking an unreasonable stance, should fall with the operator (as the acquiring authority) – see London County Council v Tobin [1959] 1 All ER 649) and 257 EG 489.

SPA3 (2018) went on to say, “If the landlord says that he wants £4,000 per annum and the court’s ruling concludes at £3,500, then the acquiring authority will be expected to pay costs (see Amalgamated Estates Ltd. v Joy stretch Manufacturing Ltd. [1980]).” MNO1 (2018) disagreed stating that, “In most cases the site provider will be liable for costs because it will be relatively straightforward to prove that they have acted unreasonably.”

This illustrates that costs could well be a determining factor when a party is deciding whether to take a case to court. In addition to this, it would appear that the MNO’s unwillingness to underwrite the site provider’s ‘reasonable costs’ is further adding to the delays in the market. But, is it reasonable to expect the MNOs to write blank cheques in an untested area? Probably not is the logical answer.

4.14 Termination and right to remove

The respondents were asked to provide their views on the new termination provision. MNO2 (2018) stated that eighteen months’ notice period is reasonable and reflects the length of time it takes for an MNO to decommission and acquire a new site. He also stated that site providers might start to factor mast sites into the design of their new buildings. SPA (2018) argued that the termination provision is flawed because the MNOs are under no strict obligation to remove their equipment after 18 months. This is because the site provider will still need to apply to the courts to order the removal of the apparatus after the initial eighteen months’ notice period. SPA3 (2018) added that the actual timeframe for removing a site from start to finish is likely to be closer to twenty-four months.

These findings are consistent with the data analysed during the literature review. The termination clause is likely to act as a deterrent in the offering of sites in the first instance. Furthermore, the landlords are also likely to investigate their right to terminate on grounds of redevelopment if they are offered low rents.


The aim of this research was to critically evaluate the new Code to clarify why the market has stagnated and identify what options are available to both parties moving forward. In order to achieve this aim, a series of objectives were worked towards as follows:

Objective 1 – Provide an overview of the Electronic Communications Code – this objective was achieved in the first chapter which involved an introduction to the new Code including its history.
Objective 2 – Describe and critically evaluate the key reforms under the new Code – this objective was achieved by undertaking a comprehensive literature review in respect of the related publications surrounding the Code which were critiqued through the means of discussion and reflection.
Objective 3 – Explore stakeholder’s views surrounding the key reforms under the new Code – this objective was achieved by collecting primary data using a qualitative approach, which were then evaluated using the method of triangulation.
Objective 4 – Propose suitable recommendations on how to stabilise the market – this objective will be provided for in this concluding chapter.

5.1 Summary

This study has established that the operators cannot ‘add’ equipment to their sites under the new site sharing provision but rather they are only allowed to upgrade their existing equipment provided there is no additional burden placed on the landowner. In addition to this, equipment can only be added at ground level if a demise has been granted, in such case any such agreement would not attract the ‘no scheme’ rule. This research has also revealed that the “two-step test” is subjective and is likely to lead to disputes in the future.
This research has confirmed that Code Rights do not entitle the operator to exclusive possession. Therefore, if the operators wish to pursue agreements under the new Code then they will not be able to locate their sites within secure compounds; this is likely to cause the operators significant problems based on the size of their portfolios.

It has also been demonstrated that the operator’s ‘no scheme’ valuations might be flawed based on Paragraph 24 referring to the value of the relevant person’s “agreement” and not “land”. In addition to this, it has been demonstrated that the provisions relating to consideration and compensation seem to overlap, resulting in further confusion. There also appears to be an ongoing attempt by the operators to disguise compensation as rent to reduce costs – a strategy which has the potential to backfire in terms of primary rooftop sites. What is more, if it can be proven that the traditional ‘no scheme’ rule is applicable then this is likely to lead to surveyors trying to find alternative uses for their client’s land to maximise its attributable value. And finally, on the matter of valuation, by applying the ‘no scheme’ rule from the outset, the operator’s conduct appears to conflict with the Code of Best Practise.

Both parties have relatively strong arguments concerning valuation, but the underlying purpose of the new Code, which is to reduce the operator’s costs (DCMS, 2016), cannot be ignored. Nevertheless, the above illustrates how important it is for site providers to seek representation in the first instance.
This study has established that rulings made by the courts are unlikely to change the site provider’s stance unless the courts consider the site providers to have acted unreasonably and order them to pay costs. In which case, the site providers would most probably be deterred from taking matters to the courts, and this is likely to result in them accepting lower rents; however, if this were the case then this would inevitably lead to a long term breakdown in the relationships between landlord and tenant.

This research has demonstrated that if the site providers can prove the public already have access to a high quality communications network then the operators may find it difficult to pass the “Paragraph 21 test”; therefore, a well informed site provider is likely to focus their attention on this part of the statute when attempting to resist an imposed agreement in the first instance.

This study has shown that the new termination provision may act as a deterrent to landowners to accommodate masts on their land in the future. It is also likely to incentivise landlords to redevelop their land, which is likely to result in the operators receiving more termination notices in the future.

It is widely accepted that ransom rents were a determining factor in the establishment of the new Code. However, this study has shown there to be little evidence to suggest such problems existed. This indicates that the operator’s intention may have been to increase their profit margins as opposed to improving their networks; although in fairness, it was more likely to have been a combination of both.

This study has identified that electricity connections and build costs are likely to be the cause of ‘not spots’ in rural areas rather than high rents. It has also been noted that the operators have to justify a site, financially, based on the level of traffic that runs through it. This suggests the operators are unlikely to invest in rural sites which means that coverage in these areas is likely to remain poor under the new Code. While this may not have any direct influence on the objectives in this research, it is an interesting finding, nevertheless.

The new Code is clearly driven by the operator’s desire to reduce rents paid to landowners. This appears to be widely accepted, even by the government. There does, however, appear to be a disconnect between what the government have provided and what the operators were seeking. From the government’s perspective, they wanted to ensure the UK could deliver a high class electronic communications service, including that of 5G, at the same rate as other countries at a greatly reduced cost; however, as it stands, the Code is not meeting its purpose, nor its objective. This leads to the inevitable question: so, what next? The next two sections in this study offer recommendations as well as advice relating to future studies.

5.2 Recommendations 

The findings show that the forthcoming court rulings and possible amendments to the existing statute are both likely to lead to a breakdown in landlord and tenant relationships, the ramifications of which are simply too great. The answer moving forward therefore appears to be relatively straightforward: both parties need to put aside their differences and work together to reach an amicable agreement. On that basis, it is recommended that a standard set of Heads of Terms are created for new and renewal agreements, an example of which can be found in Appendix C. These Heads of Terms provide the operators with exclusive possession as well as unrestricted site sharing rights, but the rental element is not based on the ‘no scheme’ rule; instead, a standard rate card is recommended. Rate cards are normally associated with ‘site sharing’ between the operators and remove the need for negotiation. Rate cards have caused very few problems in the past and are expected to help the market to advance, in this instance, within an acceptable timeframe. A copy of the proposed rate card can be found in Appendix D. The rate card shows rent reductions of 40% which have been based on the average mast prices according to Strutt and Parker’s Telecommunications Survey 2016. A premium has been added to sites located within the M25 in London, and in London City Centre, both of which are likely to be considered normal under these circumstances. It is important to note that telecommunications surveyors will no longer be required to negotiate rents under the recommended scheme; however, their advisory role will arguably become more important based on the operator’s rights under the new Code. The same applies to the site provider’s legal advisors. On that basis, the proposed level of professional fees (paid by the operators) are higher than they had been under the old Code. An increase from £1,500 plus Vat to £3,000 plus Vat has been recommended which is considered reasonable based on the increased level of risk that the agents and solicitors will be advising on. These levels of fees are expected to be accepted by the operators based on their savings in rent.

The above recommendations will substantially reduce the operator’s costs while allowing the site providers to sustain a reasonable level of income. The site providers are likely to resist in the short term but are expected to become more receptive when faced with pressure from the operators regarding imposed agreements and potentially large court costs. The forthcoming rulings from the courts will have significant bearing on this. The above compromise is considered to be the most practical solution for both parties moving forward.

5.3 Further research

At the time of writing, the new Code was in its infancy and the market had not yet established itself. A further study would be beneficial after the market has settled. Despite the importance of rollout, the telecommunications industry is rarely praised for the speed of transactions; therefore, it is expected that a further twelve months may pass before the trends in the market become apparent. It would be interesting to gauge the impact of the new Code by undertaking quantitative research. For example, by comparing the amount of new, and renewal leases, that have completed under both Codes (old and new) which would demonstrate the success of the legislation. In the meantime, it is hoped that this research plays an important role in the recovery of the market and is a suitable reference for future studies.


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Case Law

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London County Council v Tobin [1959] 1 All ER 649) and 257 EG 489


APPENDIX A – Research Participant Information Sheet
APPENDIX B – Interview Information
APPENDIX C – Proposed Heads of Terms
APPENDIX D – Proposed Rate Card

APPENDIX A – Research Participant Information Sheet

APPENDIX B – Interview Information

MNO: Mobile Network Operator
SPA: Site Provider Agent
SPSOL: Site Provider Solicitor
SP: Site Provider

Interview date: 20 July 2018
MNO1 has been a chartered surveyor for 20 years and has been involved in the telecommunication industry for the same amount of time. MNO1 has always been a tenant representative acting for MNOs such as H3G, Vodafone, and Telefonica. MNO1 worked for CTIL up until June 2018.

Interview date: 14 July 2018
MNO2 is a director at a leading firm of surveyors specialising in telecommunications. MNO2 has over 20 years’ experience acting for the MNOs including O2, Orange, and Airwave. MNO2 deals in matters concerning the acquisition, planning, and construction and also manages incoming site share applications on behalf of the MNOs.

Interview date: 23 July 2018
MNO3 is a chartered surveyor and acts for the MNOs. MNO3 formerly owned his own company which employed surveyors acting in rural communities relating to telecommunications projects. Subsequently, MNO3 has acted for Nokia and Darwen as well as Saville’s on which we worked on many projects involving the negotiation of wayleave agreements relating to fibre networks.

Interview date: 30 July 2018
MNO4 is a chartered surveyor specialising in compulsory purchase. The company he works for has been instructed by the MNOs to undertake the valuations under the new Code. He has had over fifteen years’ experience working in the industry.

Interview date: 20 August 2018
Similar to MNO4, MNO5 is a chartered surveyor specialising in compulsory purchase. The company he works for has been instructed by the MNOs to undertake the valuations under the new Code. He has had over twenty years’ experience working in the industry.

Interview date: 16 July 2018
SPA is a chartered surveyor and RICS Registered Valuer. SPA1 started work in 1998 as a graduate surveyor dealing with acquisition and planning work for the mobile phone MNOs. SPA1 now acts on behalf of site providers.

Interview date: 13 July 2018
SPA2 is a chartered surveyor and an Expert in the field of telecommunications. He acts as a consultant for a large UK property and deals in matters concerning arbitration and matters requiring third part determination. SPA2 works predominantly for site providers.

Interview date: 20 July 2018
SPA1 is a chartered surveyor and acts as an arbitrator and independent Expert in dispute resolution matters. SPA3 works for a company that works directly with the RICS and Law Commission in consultation including issues relating to the new Code.

Interview date: 20 August 2018
SPA 4 is a solicitor that specialises in telecommunications. He works on behalf of the site provider, has over thirty years’ experience and has represented a number of his client in court.

Interview date: 16 July 2018
SP1 is a site provider with telecommunications apparatus installed on their rooftop in Nottingham and is well versed in matters concerning telecommunications and has a basic understanding of the Code.

APPENDIX C – Proposed Heads of Terms 

APPENDIX D – Proposed Rate Card